Property Taxes on the Rise (But Still Lower than You’d Expect!)

Property taxes (“taxe foncière”) in France are on the rise, having increased by close to 15% since 2010, as reported by the UNPI, (Union Nationale de la Propriété Immobilière), or National Association of Landlords.

Revenues are collected to fund local services and are paid regardless of whether the property is occupied by the owner, rented out or vacant. The tax is divided among the property owners that support that local area and therefore can be higher or lower depending on how many property owners support that particular budget. Since 2010, taxes have increased 14.7% country-wide, however Paris applied the lowest tax rate in 2015 at 5.13% (largely due to the density of the population) compared with other cities such as Lyon with 20.34%. Lyon was one of four cities where taxes increased more than 20% during the five year period, the others being Angers, Clermont-Ferrand and Créteil.

The rate for the “taxe foncière” is multiplied by the tax rental value after a 50% rebate by the rates of three local authorities: the city or village where the property is located (“commune”), the group of “commune”, the “département.” The rental value is not the same as the market value and is revalued annually throughout the country. The mean rate for the largest cities in France is approximately 687€ per year, Paris being the least expensive being below 500€ per year.

Compare this with U.S. property tax rates and you might find it shocking as France is thought to be a highly taxed society. When it comes to property tax, however, the difference is significantly lower. The average U.S. property owner spends as much as $2,127 on property taxes annually, according to the U.S. Census Bureau. The highest property tax paid is in New Jersey with a rate of 2.29%, an average of $7,335 in taxes annually. The lowest average tax paid was in Alabama with $538, based on a rate of .043%.

France imposes one other property tax: “Taxe d’Habitation.” This tax is paid by whomever inhabits the property on January 1st. If a renter occupies it, then the renter pays it. If it’s used occasionally and rented seasonally, then generally the owner pays it. The basis for the tax is the rental value (“valeur locative brute”) multiplied by each local authority’s tax rate of which there are four different rates: one for the “commune” or town hall, one for the “syndicat de communes” and one for “intercommunalité”(with two different types of group of “communes”), one for the “taxe spéciale d’équipement” (tax for local authorities’ owned company in charge of town planning). Normally, the tax is quite similar in amount to the taxe foncière.

We have found that in Paris, each tax can be “guestimated” to equal approximately .0001% of the value of the property. In real terms, a property valued at 500,000€ might be assessed about 500€ for each tax. So, while property taxes in France have increased, the bottom line is still significantly lower than you would expect to spend for the same valued property Stateside.

A bientôt,

Adrian Leeds
The Adrian Leeds Group

Respond to Adrian: [email protected]

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